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Seizing the Momentum for Impact Investing

Seizing the Momentum for Impact Investing

May 25, 2016

It’s not every day you find the top officers from the biggest foundations in the United States chatting about their commitment to impact investing. It happened, though, at the Mission Investors Exchange (MIE) biennial conference in Baltimore, Maryland. From May 9 to 11, the CEOs of Meyer Memorial Trust and the Ford, Kresge, MacArthur, McKnight and Surdna foundations each took the stage to share their stories, commitment and strategies for "Seizing the Momentum" of impact investing.

The size and stature of these foundations are a testament to MIE’s organizational reach and impact investing’s increasingly mainstream appeal. It may be a little overwhelming, however, for smaller foundations and organizations just beginning to explore this tool. The MIE conference can feel like the arcade at the state fair: Over here we have real estate strategies to fight gentrification! Over there are fisheries, already accelerated to Version 2.0!  And over there, how to invest our way out of climate change! I think this is overwhelming in a good way, though.

Plenary session at Mission Investors Exchange conference (l-r): David Gergen, Harvard Kennedy School (moderator); Jean Case, The Case Foundation; Rip Rapson, The Kresge Foundation; Julia Stasch, MacArthur Foundation; Darren Walker, Ford Foundation.

Partnership Opportunities

At the conference, Philanthropy Northwest and The Giving Practice organized a session on bringing federal resources to communities alongside impact investments, including a great primer on partnering with community development financial institutions (CDFIs) to make small business lending or affordable housing loans. This strategy has low financial risk and operating costs for private investors, explained Annie Donovan, director of the U.S. Treasury CDFI Fund. Investors can zero in on specific interests like food deserts, charter schools and health facilities when they work with CDFIs, as the Greater Tacoma Community Foundation and other Philanthropy Northwest members are now doing.

Salin Geevarghese, a deputy assistant secretary at the U.S. Department of Housing and Urban Development (HUD), and Kristin Pierre, a consultant who formerly worked with HUD and the Environmental Protection Agency (EPA), confirmed that federal agencies are working hard to get in sync with impact investors. They suggested federal programs can create investment pipelines in local communities. For example, the EPA helps communities organize efforts to create greener supply chains among local businesses, resulting in many investable projects that local impact investors can consider.

Tim Larson of Ross Strategic, a consulting firm with offices in Seattle and Austin, Texas, shared ways for private investors to get together with local and state government in conservation projects. For example, a foundation in Texas bought and held a key conservation property to give its county government time to implement an open space bond that eventually bought the land. Tim sees these partnerships catching on and expanding. He now sees impact investors getting involved on the front end of planning for BP settlement funds in the Gulf Coast, positioning conservation to receive funds as part of their grantmaking — and possibly investing as the project unfolds.

Exploring Our Potential

This and other sessions at the conference sparked enough ideas to keep a foundation busy for months. The trick is to pursue strategies that build on the foundation’s current knowledge and relationships — and to watch dollars spent on operationalizing impact investment strategies. (When a strategy needs new underwriting and investment management capacity, it can be expensive.)

As a Catalyst Fellow, I'm also excited about an idea inspired by this conference: exploring the potential for rural foundations in Philanthropy Northwest's network to partner with local development agencies on economic development and housing projects. Stay tuned.

Rosalie Sheehy Cates is a Philanthropy Northwest Catalyst Fellow, focused on impact investing, and a partner with The Giving Practice, our national consulting team. She looks forward to continuing these conversations with our network's impact investors at Philanthropy Northwest's annual conference, Under One Sky, in her native Montana this fall. Email her at rcates@philanthropynw.org.